Data will be the key battleground
Businesses that want to succeed in personalisation will also need to succeed in retaining – and effectively using – data.
However, with GDPR coming into force next May, the topic of acquiring, storing, processing and using customer data will dominate in the first half of the year. This opens opportunities for more agile retailers to approach the data problem in new and innovative ways.
Products like Criteo, an open environment powered by machine-learning technology that’s optimised for the huge amounts of shopping data that ecommerce businesses have access to, are enabling smaller businesses to share anonymous data amongst themselves to build up a more complete picture of their customers and react to their needs, helping in their differentiation – and ability to take on the giants of retail.
Gamification will grow beyond loyalty
While not a new concept, we expect gamification to feature in many retailers’ marketing mix. By nature, humans are competitive and motivated by reward. Gamification will enable marketers to turn shopping into a game, helping brands engage with their customers, increasing digital dwell-time, promoting loyalty and helping boost sales.
Loyalty schemes are the traditional use of gamification in retail, however VR and AR will open the possibilities to retailers of driving new and returning customers to stores. Snatch is one example of a platform: an "AR treasure hunt" that places digital/AR brand rewards in physical locations.
Digital retailers hitting the ground
As traditional retailers have transitioned to online models, the reverse can now be said with digital-first businesses. In some categories, such as furniture, traditional offline retailers have been disrupted by the likes of Sofa.com, Made.com and the Cotswold Company.
These businesses have now transitioned themselves and opened showrooms to bring the touch-and-feel retail experience direct to their customers.
This is particularly important with "big ticket" items where customers are traditionally reticent to spend online without trying first. However, without the need for a large retail estate, overheads can be kept down, and product lines updated quicker to meet customer desires, enabling the delivery of the "fast fashion" trend across more sectors.
Going the final mile
We will see the number of mini-distribution hubs increase, particularly in metropolitan areas, as stores seek to differentiate their offering by providing distribution services.
It’s no surprise that in the US, Whole Foods, acquired by Amazon earlier this year, is leading the charge on this – indeed this acquisition adds to Amazon’s Prime proposition, providing Amazon mini-distribution centres across key regions.
As a result, the growth in urban mini-distribution centres will drive drone delivery – 2018 could be the first dawning of the age of autonomous vehicle delivery.
Voice will get louder
With four of the world’s biggest companies – Google, Apple, Amazon and Microsoft – having rolled out their voice-enabled technologies into home products, we can expect voice integration to be the new feature of even more products, making its way into a far greater number of homes.
The Amazon Echo was deemed the surprise success of Christmas 2016, in part because it is cross generational – it’s entertaining and useful for children and adults alike, with an extremely intuitive interface.
As more time is spent with voice assistants and more brands integrate voice technology into their products, consumers are finding more and more practical uses for it.
What we predict will happen is that more people shop via voice command, whether that’s through the assistant on their fridge to order more milk when they see they’ve run out, or while watching television and order something they have seen promoted during the ad break – the possibilities are there to be taken.
2017 saw an explosion in the use of cryptocurrencies, with the value of these digital currencies soaring. While this is down in part to the speculative nature of perceived value, what Bitcoin has done is prove that blockchain, which underpins digital currencies, delivers on robustness, security and transparency.
As a result, as we move into 2018 we’ll see the adoption of blockchain in other applications. In retail specifically, blockchain has the scope to transform multiple elements of the retail supply chain and customer journey.
Greater personalisation in marketing
A trend set to stay – and grow – next year, personalisation is an area ripe for further exploitation. The need for differentiation will drive marketers towards marketing tools and data-driven information, to completely understand each customer.
The benefits of this personalisation will be seen in increased traffic, conversion, loyalty and – ultimately – customer lifetime value.
There are many innovative software platforms on the market - such as Photospire which creates personalised videos for brands - which will help businesses engage their audience through contextualised, super-personalised content and provide frictionless, enjoyable experiences.
Placing product development in the hands of bloggers
If 2017 was the year of the influencer, then 2018 is the year that we see the influencer model turned on its head.
In China there has been a notable growth in "blogger incubators" whereby an ecommerce company creates its own marketing channel and blogger fan-base, before creating the products that will perfectly suit the carefully nurtured audience.
"Traditional" retailers who are finding gaps in their offering will continue to look for ways to plug the holes that leave them in the wake of competing omnichannel retailers.
True’s Live Network brings together the giants of retail with the innovative and new businesses that represent the future of the industry, with a view to collaboration and adoption – and investment. As a result, we see first-hand how the more "traditional" retailers are investing in digital-first businesses which will allow them to explore ways to differentiate and stay relevant.
Matt Truman is chief executive and co-founder of True